What is PARAMETRIC INSURANCE? What does PARAMETRIC INSURANCE mean? PARAMETRIC INSURANCE meaning

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What is PARAMETRIC INSURANCE? What does PARAMETRIC INSURANCE mean? PARAMETRIC INSURANCE meaning - PARAMETRIC INSURANCE definition - PARAMETRIC INSURANCE explanation.

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Source: Wikipedia.org article, adapted under https://creativecommons.org/licenses/by-sa/3.0/ license.

Parametric insurance is a type of insurance that does not indemnify the pure loss, but ex ante agrees to make a payment upon the occurrence of a triggering event. The triggering event is often a catastrophic natural event which may ordinarily precipitate a loss or a series of losses. But parametric insurance principles are also applied to Agricultural crop insurance and other normal risks not of the nature of disaster, if the outcome of the risk is correlated to a parameter or an index of parameters.

Parametric insurance may reduce transaction costs involved in writing and administering insurance p...

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